The Great North American Union: A Marriage Nobody Should Want

March 23, 2025

It seems like that all Canadians are talking about these days are tariffs and President Trump’s repeated desire to make Canada the 51st state of the U.S.. Trump’s blustering rhetoric has changed the political situation in Canada. Poilievre’s Conservative party has seen a 20% lead in the polls collapse into, at best, a dead heat, and at worst, a five point lead for the Liberal Party. The fact that the Liberal Party, after a decade of economic malfeasance could have an over 50% chance of winning the next election with an unelected climate fanatic and Wall Street soporific shark in remarkable. Carney was one of the most inept and destructive governors in the history of the Bank of England. Also, Carney was one of the architects of the policies that decimated the Canadian economy, as the chart below illustrates.

An old professor of mine used to say that he thought Canada was a nation so blessed that no government could screw it up, until Pierre Trudeau came along. Now, under his son, Canada is a country so self-sabotaging that it might be impossible to turn around. There is something about Canadian culture that abhors reason and rational thought and embraces moochery as a virtue. Perhaps that is why Canadian elites resemble the villains of an Ayn Rand novel; morally corrupt men and women incapable of productive achievement full of the hubris only a self-deluded weakling could justify. That describes a sizeable minority of the executives in the investment business I worked with.

Canadians and even many Americans, on both sides of the 51st state issue fail to think about how difficult it would be in practice to merge the two nations. We have a recent example of the difficulty of combining nations together in recent economic history. I witnessed it and it was anything but simple. It took decades of many people working tirelessly to finally make it happen. And unlike the Canada-U.S. situation, the majority of people actually favored it.

Of course, I am referring to the creation of the E.U. The precursor to the E.U. was the European Economic Community, commonly referred to as the Common Market that was established by the Treaty of Rome in 1957, eliminating trade barriers between the founding nations. The movement for European integration continued to gain momentum over the years until the signing of the Maastricht Treaty on February 7th, 1992. The new common currency of Europe, the Euro, replaced the French Franc, German Deutschmark, Italian Lira and other currencies. It came into being on January 1, 1999. This process took forty-two years from the formation of the Common Market. A U.S.-Canada union, having only two countries might be simpler but the process would take numerous years, if not decades. President Trump cannot simply snap his fingers and have it magically happen. It took a decade to complete the Trump Tower in Toronto, an unremarkable skyscraper. The name only survived a few years. Decisions can be made quickly. Implementation is another story.

Even the assumption of being the 51st state is ridiculous. Canadian provinces would demand that they keep their territorial and administrative integrity. Canadians would not settle for two senators. America would be faced with between seven and thirteen new states, almost all fiercely anti-Trumpian. The Republicans would not achieve power for decades.

How would the union handle mundane matters like the debt? Would Canada, which is has a lower debt to G.D.P. ratio enjoy seeing their already high debt levels increase to U.S. debt levels? What about the Canada Pension Plan which is actually funded with a giant investment portfolio of $700 billion Canadian? Would Canadians just give the up the fund to make a small dent in the $36 trillion U.S. national debt and hope their government pensions be paid by already struggling current U.S. taxpayers? U.S. social security is an unfunded liability. Current taxpayers pay for retirees.

What about the new U.S. dollar? What exchange rate would Canadians be able to trade in their dollars for? Americans would probably not be happy at a dollar for dollar trade. Canadians would be foolish to exchange the Loonie at its present cost. The two medical systems are vastly different. Both have their issues and thinking people in either nation might not be happy with picking between two poorly rated systems. Adding both the private and public sectors, Americans pay significantly more for their healthcare. Perhaps the South Koreans or Scandinavians could be brought in to help.

A union makes little sense to Americans. Canadians would benefit with lower tax rates, and eventually, a higher standard of living (unless the U.S. succeeds in wrecking its economy.) However, Americans might not enjoy subsidizing their poorer and less industrious new citizens. “Old” America would have the same issue with the country formally known as Canada that the former West German area has with the Eastern part. To this day, western Germans resent carrying the east economically, and the formerly communist east resents individual sovereignty demanded in a freer country.

Both countries have entrenched parasite classes but Canada’s make up a larger part of the workforce. That is one of the main reasons why Canada has lagged the U.S. dramatically in economic growth. Parasites require a host. The average Canadian pays over 40% of his income in taxes. All too many Canadians exist on at least some form of government subsidy so the taxes they pay are effectively rebates back to the government. Many would not think of themselves as being supported by the government but journalists and film and television workers, for example, have much of their income subsidized. They are not the only ones. Their jobs would not exist without handouts. That is why Toronto continues to have four daily newspapers. This situation creates a further burden to productive Canadians who have been bled almost dry. Sadly, most Canadians have become poorer.

This idiocy over the U.S. annexing Canada has been stoked by a reckless president whose behavior seems to be increasingly irrational by the week. The Liberal Party of Canada and the government media are fear-mongering in order to win the next election. This Machiavellian strategy has Canadians supporting the same politicians who drove the country’s economy into the ground. Ironically, a Carney government could quickly precipitate a national unity crisis resulting in the secession of Alberta. This would, in turn, eventually result in Quebec independence. Carney is a far bigger threat to the survival of Canada than Trump is.

Make no mistake. The tariff policy of the U.S. would damage both economies, as well as much of the rest of the world. It’s probably time for investors to hedge their bets offshore. However, Trump will not just acquire Canada in some sort of levered buyout.